EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917658
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel applied for a TCO in respect of certain lubrication pumps on 25 May 2009.
Instrument
TCO No 0917658 was made on 14 August 2009. It declares that those certain lubrication pumps are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0917658 is taken to have come into force on 25 May 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0917658 was enacted in 2009 under the Customs Act 1901, establishing a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which provide a lower rate of customs duty on specified goods. The Act addresses the gap in tariff concessions that could support Australian industries by ensuring that certain goods, which are not produced domestically or are not readily substitutable by Australian-made products, receive duty relief. This helps to protect and encourage domestic production where feasible while allowing for competitive imports where necessary. The policy objective, as outlined in the Act, is to ensure fair and efficient trade practices by appropriately adjusting tariff rates based on the availability of domestic substitutes. The instrument was enacted by the Australian Government and commenced on the date the application was lodged, 25 May 2009, ensuring that the rights of existing parties were not adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0917658 applies to the reduction of customs duty on certain lubrication pumps, as specified in the Customs Act 1901. This Act, a Commonwealth legislation, empowers the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods that are not produced in Australia and have no substitutable goods locally available. The Act applies to any person who applies for such concessions under the specified conditions, and the geographic reach of the Act is nationwide, given its Commonwealth nature. The application process for a TCO requires the CEO to consider whether the core criteria are met, particularly the absence of substitutable goods produced in Australia. Notably, the Act excludes certain goods listed in section 269SJ, which cannot be subject to a TCO. The scope of this particular TCO, Instrument No. 0917658, is limited to the specific lubrication pumps for which Bluescope Steel applied. This instrument came into force on the date of application, 25 May 2009, and does not impose any new liabilities or affect the rights of any person as of the date of registration. The rights of importers are positively affected, allowing them to apply for a refund of duty on the specified goods imported since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0917658, under the Customs Act 1901, establishes the conditions and process for granting tariff concessions on certain goods. Section 269F of the Act allows for applications to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which can lower the rate of customs duty on specified goods. A TCO application is deemed to meet the core criteria if, on the day of application, no substitutable goods are produced in Australia in the ordinary course of business, as per section 269C. This requirement ensures that the concession is granted only when necessary to support industries that cannot compete with domestically produced alternatives.
The obligations under this legislation require applicants, such as Bluescope Steel, to demonstrate that no substitutable goods are being produced domestically. Once the CEO is satisfied that the application meets the criteria, they are mandated to make a written order specifying the concession, as outlined in section 269P(3). The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the concession, as stipulated in subsection 269K(1). In this instance, no submissions were received, allowing the TCO to proceed.
The legislation imposes specific consequences for breaches of the TCO provisions. While the Act does not explicitly state penalties for non-compliance, general principles of administrative law and the Customs Act would apply. Any misuse of a TCO or fraudulent claims could potentially lead to civil or criminal penalties. The Act does not detail specific penalties but references to the broader Customs Act and associated regulations might apply, including fines and imprisonment for more severe breaches.
The TCO ensures that it does not adversely affect the rights of any person other than the Commonwealth, as outlined in subsection 269S(1). Importers, however, stand to benefit from the TCO as they may apply for a refund of duty on goods imported since the effective date of the concession. This provision aims to alleviate the financial burden on importers and encourage fair trade practices within the Australian market.